Fulcrum Point

AAA

DEFINITION of 'Fulcrum Point'

The turning point in which a security or the economy in general makes a major change in direction. A fulcrum point can be very profitable for investors who are able to identify that a sharp price move is about to take place. For example, after the U.S. equity markets plunged in late 2008, they recovered sharply in early 2009.

INVESTOPEDIA EXPLAINS 'Fulcrum Point'

It is very difficult to predict or identify a fulcrum point contemporaneously, but the promise of very high returns keeps many investors looking for them. Unfortunately, these movements are so rare that few succeed in both predicting that a movement should occur and in timing the movement correctly. Often, what may seem initially to be a major sharp reversal may instead turn out to be just a minor movement before the major trend resumes.

RELATED TERMS
  1. Point & Figure Chart

    A chart that plots day-to-day price movements without taking ...
  2. Reversal

    A change in the direction of a price trend. On a price chart, ...
  3. Bottom

    The lowest point or price reached by a financial security, commodity, ...
  4. Payer

    An entity that makes a payment to another. While the term payer ...
  5. Inflection Point

    An event that results in a significant change in the progress ...
  6. Asset

    1. A resource with economic value that an individual, corporation ...
Related Articles
  1. Fundamental Analysis

    What is Gearing?

    Gearing, also called leverage, is the degree to which a company’s operations are funded by lenders versus shareholders.
  2. Economics

    Understanding Money Supply

    Money supply – also called money stock -- refers to the total amount of currency and other liquid financial products in an economy at a particular time.
  3. Economics

    What is a Wholly Owned Subsidiary?

    A company whose common stock is 100% owned by another company, called the parent company.
  4. Economics

    Understanding Specialization

    Specialization is when a person, business, or region focuses their productive efforts on a smaller subset of a larger system for a competitive advantage.
  5. Economics

    What is the Income Effect?

    In economics, the income effect is the change in the consumption of goods caused by a change in income, whether income goes up or down.
  6. Investing Basics

    What is a Mid-Cap?

    Mid-cap companies are those with a market capitalization between two and $10 billion.
  7. Economics

    What is M1?

    M1 is a measurement of money supply that includes all hard currency, plus demand deposits such as checking accounts.
  8. Economics

    What’s Missing For A Turnaround In Brazil?

    Today, many investors have written off Brazil following several years of poor performance, decelerating growth and chronically high inflation.
  9. Economics

    Worried About The Fed Hike?

    With the Nasdaq crossing the threshold and the broader equity bull market entering its 7th year, many investors are anxious that stocks are in a bubble.
  10. Investing

    What is Market Value?

    Market value is the price of an asset that is traded or offered for sale in a public forum where multiple buyers are allowed to make offers to buy that asset.

You May Also Like

Hot Definitions
  1. DuPont Analysis

    A method of performance measurement that was started by the DuPont Corporation in the 1920s. With this method, assets are ...
  2. Asset Class

    A group of securities that exhibit similar characteristics, behave similarly in the marketplace, and are subject to the same ...
  3. Fiat Money

    Currency that a government has declared to be legal tender, but is not backed by a physical commodity. The value of fiat ...
  4. Interest Rate Risk

    The risk that an investment's value will change due to a change in the absolute level of interest rates, in the spread between ...
  5. Income Effect

    In the context of economic theory, the income effect is the change in an individual's or economy's income and how that change ...
  6. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
Trading Center